Paramount Gold and Silver Corp.
TSX : PZG
NYSE Amex : PZG
FRANKFURT : P6G

Paramount Gold and Silver Corp.

February 15, 2011 07:45 ET

Paramount Gold Announces Positive Drill Results From Sleeper Gold Project in Nevada

WINNEMUCCA, NEVADA--(Marketwire - Feb. 15, 2011) - Paramount Gold and Silver Corp. (NYSE Amex:PZG)(TSX:PZG)(FRANKFURT:P6G)(WKN:A0HGKQ) ("Paramount") announced today assay results from the first four core holes drilled on the West Wood target at its 100% owned Sleeper Gold Mine Project in Nevada have returned gold values consistent with past production from the project and confirmed the resource model developed by the previous owner. Assay results from a further 14 holes completed at the Sleeper project are expected shortly.

In September, 2010 Paramount announced a $3 million exploration program designed to expand and upgrade resources at the Sleeper project. The exploration program had three main objectives, they were: [1] definition drilling to up-grade resources at the West Wood deposit and prepare it for a Preliminary Assessment [`PA`] of its economic potential; [2] delineation drilling to expand and evaluate resources at the Facilities deposit for possible inclusion in the PA; and [3] drill evaluation of up to six new priority targets on the property identified by Paramount's geological team. [See property map for targets - http://www.paramountgold.com/_docs/sleepertargetmap0913.pdf].

Paramount CEO Christopher Crupi noted, "The evidence from the drill program suggests that we are likely to have success upgrading inferred resources to higher categories and increasing the overall size of the West Wood deposit. The first four holes targeted distinct gaps between previous drilling. All four intercepted good grades over excellent widths as predicted by the resource model. We can now proceed with the resource model provided by the previous owner with confidence. In addition, we encountered mineralized intervals in the hanging wall which provide evidence of continuity for several of these adjacent zones, likely enabling them to be classified as resources." [See cross-section - http://paramountgold.com/_docs/sleeperWWSections.pdf].

Results from the four holes are as follows:

Hole ID Total Depth (m) From (m) To (m) Thickness (m) Au g/T Ag g/T
PGC-10-001 351.7 116.8 120.5 3.7 5.32 NA
    124.4 132.1 7.6 3.04 NA
    147.3 161.0 13.7 0.73 NA
    167.1 170.2 3.1 1.29 2.5
    174.8 179.3 4.6 0.89 1.2
    183.9 189.3 5.3 1.75 NA
    203.7 209.8 6.1 1.31 4.0
    219.0 252.5 33.6 1.52 4.0
    275.4 280.0 4.6 0.59 3.0
    284.6 290.7 6.1 1.35 6.8
    301.3 305.9 4.6 0.52 1.2
             
PGC-10-002 230.9 91.2 98.8 7.6 0.85 NA
    103.5 132.4 28.9 0.95 1.0
    170.5 173.5 3.1 0.89 1.9
    181.0 185.3 4.2 1.28 1.4
    188.8 230.9 TD 42.1 2.72 13.0
             
PGC-10-003 335.8 168.7 171.7 3.1 0.84 NA
    191.5 196.1 4.6 1.02 NA
    209.8 240.3 30.5 1.57 1.1
    258.6 275.1 16.5 1.00 2.5
    283.3 290.7 7.3 0.76 2.4
    298.0 302.6 4.6 0.68 0.4
    313.5 329.2 15.7 0.73 2.6
             
PGC-10-004 219.0 145.8 150.4 4.6 0.88 NA
    183.9 205.3 21.4 0.63 13.2
    215.9 219.0 3.1 1.73 3.2

West Wood Vein Target

The West Wood target is on the southwest corner of the Sleeper Pit and has been extensively drilled to reveal a high grade core zone surrounded by lower grade gold concentrations. With characteristics similar to the original Sleeper deposit, this target has NI 43-101 compliant estimated resources of:

  • Indicated Resources of 16.96 million tonnes grading 0.98g/t of gold and 4.6g/t of silver containing 530,000 ounces of gold and 2.5 million ounces of silver at a 0.4g/t Au cutoff;
  • Inferred Resources of 390,000 tonnes grading 0.56g/t of gold and 2.3g/t of silver containing 10,000 ounces of gold and 30,000 ounces of silver at a 0.4g/t Au cutoff.

Six core holes totaling 1,705 meters, and three reverse circulation holes totaling 957 meters have been completed on the West Wood target. Drilling was conducted to determine the northern limits of the West Wood target and to upgrade resources. This work also obtained sample material for metallurgical testing and geotechnical information for conceptual pit planning to enable basic processing and engineering studies required for a PA. The southern limit of the West Wood target remains open under the historical waste dump and will be evaluated in the coming months in conjunction with evaluating the gold-bearing potential of the substantial amount of waste material from the former mine. Further results are expected shortly.

Facilities Target Area

The Facilities Target is on the eastern side of the Sleeper pit and is a broad area of continuous lower grade gold-bearing material. Several drill holes by previous operators encountered bonanza grade intersections but the drill spacing was too wide to define the extent and distribution of the higher grade material. It is anticipated that defining the limits of the higher grade intervals in the Facilities Target should have a positive effect on the grade of this resource. The current NI 43-101 resource estimate is the following:

  • Indicated Resources of 10 million tonnes grading 0.69g/t of gold and 7.8g/t of silver containing 220,000 ounces of gold and 2.5 million ounces of silver at a 0.4g/t Au cutoff; 
  • Inferred Resources of 19.6 million tonnes grading 0.60g/t of gold and 6.7 g/t of silver containing 370,000 ounces of gold and 4.2 million ounces of silver at a 0.4g/t Au cutoff.

A program of eight reverse circulation drill holes totaling 2,330 meters, and one core hole of 261.8 meters was completed on the Facilities Target. These holes were designed to evaluate the continuity of existing bonanza-grade intersections. Results are expected shortly.

New Targets

Results from work at West Wood and Facilities have identified several new targets not previously considered. Ongoing work is dedicated to prioritizing other targets for drill testing. Originally, a drill campaign of approximately 1,250 meters was established for these target tests, however, the size and depth of identified targets may require expansion of this program.

This news release has been reviewed by Glen van Treek, a Vice President of the Company and William Threlkeld a Qualified Person pursuant to National Instrument 43-101. Although Paramount Gold is a U.S. domiciled corporation and a full SEC registrant, Paramount reports its mineral resources according to the Canadian standard known as National Instrument 43-101 to facilitate comparison with other similar companies that trade on the TSX.

Cautionary Note to U.S. Investors Concerning Estimates of Indicated and Inferred Resources:

This news release uses the terms "indicated resources" and "inferred resources". We advise U.S. investors that while these terms are defined in, and permitted by, Canadian regulations, these terms are not defined terms under SEC Industry Guide 7 and are normally not permitted to be used in reports and registration statements filed with the SEC. "Inferred resources" have a great amount of uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. Under Canadian rules, estimates of inferred mineral resources may not form the basis of a feasibility study or prefeasibility studies, except in rare cases. The SEC normally only permits issuers to report mineralization that does not constitute SEC Industry Guide 7 compliant "reserves", as in-place tonnage and grade without reference to unit measures. U.S. investors are cautioned not to assume that any part or all of mineral deposits in this category will ever be converted into reserves. U.S. investors are cautioned not to assume that any part or all of an inferred resource exists or is economically or legally minable.

Safe Harbor for Forward-Looking Statements:

This release and related documents may include "forward-looking statements" including, but not limited to, statements related to the interpretation of drilling results and potential mineralization, future exploration work at the Sleeper Gold Mine Project and the expected results of this work. Forward-looking statements are statements that are not historical fact and are subject to a variety of risks and uncertainties which could cause actual events to differ materially from those reflected in the forward-looking statements including fluctuations in the price of gold, inability to complete drill programs on time and on budget, and future financing ability. Paramount's future expectations, beliefs, goals, plans or prospects constitute forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995 and other applicable securities laws. Words such as "believes," "plans," "anticipates," "expects," "estimates" and similar expressions should also be considered to be forward-looking statements. There are a number of important factors that could cause actual results or events to differ materially from those indicated by such forward-looking statements, including, but not limited to: uncertainties involving interpretation of drilling results, environmental matters, lack of ability to obtain required permitting, equipment breakdown or disruptions, and the other factors described in Paramount's Annual Report on Form 10-K for the year ended June 30, 2010 and its most recent quarterly reports filed with the SEC available on www.sec.gov and applicable Canadian securities regulators available on www.sedar.com and X-Cal's filings with the applicable Canadian securities regulators available on www.sedar.com.

Except as required by applicable law, Paramount disclaims any intention or obligation to update any forward-looking statements as a result of developments occurring after the date of this document.

Contact Information

  • Paramount Gold and Silver Corp.
    Christopher Crupi, CEO
    Chris Theodossiou, Investor Relations
    866-481-2233 / 613-226-9881